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On May 15th, 2020, AzurRx BioPharma, Inc. AZRX filed its first quarter 2020 10-Q with the SEC for the three month period ending March 31, 2020. Highlights year to date include the appointment of a new CFO and board member, receipt of ~$3.5 million in French tax credits, confirmation of manufacturing and distribution agreements, and IRB approval to launch the OPTION 2 trial which should begin in the next few weeks. We expect to see an academic manuscript available for the OPTION study this fall at the North American Cystic Fibrosis Conference.
As expected, no revenues were reported during the first quarter of either 2019 or 2020. Operating expenses for the 1Q:20 period were $2.9 million, down 36% compared to the prior year. General and administrative expenses were $1.4 million, down 45% on a host of lower expense items, including stock compensation, legal, director's fees, corporate communications and rent. These declines were offset by increases in other items including consulting, insurance, personnel, travel and entertainment and IT administration. Research and development expenses contracted 27% to $1.4 million. The change was attributed to lower stock based compensation, depreciation and amortization, direct clinical trial costs, consulting and personnel costs.
Cash on the balance sheet was $1.6 million and notes payable and convertible debt were held at $3.3 million as of March 31, 2020. Cash burn for the three month period was ($1.3) million which compares with ($2.6) million for the same quarter last year. Following the end of the reporting period, AzurRx issued 788,464 shares to Lincoln Park for proceeds of $457 thousand and received $1.4 million from the French tax credit.
OPTION 2 Trial
AzurRx will soon launch its next trial which will determine the optimal dose for the Phase III study. It will be a Phase IIb, open label, 2x2 crossover design designated the OPTION 2 Enteric Dose-Escalation Trial. The target population will be patients with EPI due to CF. Based on the results in the completed OPTION 1 trial, the scientific team will add the use of enteric capsules (1) to delay release of MS1819 until it reaches the lower gastrointestinal tract. The shift to enteric capsules was made after it was determined that approximately half of MS1819 was inactivated in the stomach. The enteric capsule will prevent the drug from degrading until it reaches the duodenum. The FDA is familiar with the enteric capsule and we do not anticipate any difficulties or requirements for additional studies with this change in MS1819's formulation.
OPTION 2 Trial Design (2)
Severe EPI Trial
In early July 2019, AzurRx launched a Phase II trial investigating MS1819-SD in combination with standard pancreatic enzyme replacement therapy (PERT) for patients with cystic fibrosis (CF) that suffer from severe exocrine pancreatic insufficiency (EPI). These patients are unable to maintain weight and suffer from fat malabsorption despite taking the maximum dose of PERT. This population with an unmet need may be suitable for an expedited pathway to approval for MS1819-SD. The study will be conducted at multiple European sites including locations in Hungary and Spain with an enrollment target of 24 and a primary endpoint of safety and CFA greater than 80%.
MS1819 Trial Map (3)
Agreements
AzurRx extended two agreements to manufacture and package, label and distribute MS1819 for the Phase II trials. In April, Delpharm was selected to act as the contract development manufacturing organization (CDMO) to manufacture drug product supply of MS1819 for the OPTION 2 trial. Delpharm is a French manufacturer of pharmaceutical products with 17 production sites in Europe and Canada. As of April 2020, a preliminary batch was manufactured in preparation for a current good manufacturing practices (cGMP) batch using the new enteric capsule formulation. Despite production work starting during the coronavirus pandemic, there have been no delays to its production and no delays are expected in the effort to launch the OPTION 2 study in 2Q:20. Shared in an early May release, Creapharm was selected to provide packaging, labelling and distribution of enteric drug product for use at Phase II trial sites throughout Europe and the United States. Creapharm is a French company with packaging plants in France and the United States. The partner will send packaged product to AzurRx trial sites in Poland, Hungary, Spain, Turkey and the United States. No pandemic-related delays are expected in Creapharm's efforts.
AzurRx Pipeline (4)
Historical and Forward Looking Highlights
‣ Receipt of French Tax Credits – 1Q:20/2Q:20
‣ Various capital raises – 1Q:20
‣ Delpharm Manufacturing Agreement – April 2020
‣ TDN & IRB Approval to Start OPTION 2 Trial – April 2020
‣ Creapharm Packaging, Labeling & Distribution Agreement – May 2020
‣ Abstract Presentation at Digestive Disease Week – May 2020
‣ Launch of OPTION 2 trial – 2Q:20
‣ Presentation of Phase II CF study at N. American CF Conference – October 2020
‣ Initial results of CF combination study – 1Q:21, coronavirus dependent
‣ Completion of OPTION 2 trial – 1Q:21, coronavirus dependent
Pathway Forward
To date, AzurRx has completed preclinical Phase I and Phase II trials in chronic pancreatitis and cystic fibrosis patients with exocrine pancreatic insufficiency. Data from the most recent Phase II CF trial demonstrated safety, non-inferiority in half of patients compared to varying doses of PERT and a high CNA of 93%, supporting the hypothesis that a protease is not needed for effective MS1819 therapy. Next steps require that an optimal dose be determined and further study be conducted in the OPTION 2 Phase IIb study which AzurRx expects to launch in 2Q:20. MS1819 will use an enteric capsule to determine the optimal dose for a registrational trial in 2021. Concurrent with the work on the OPTION 2 trial, AzurRx is conducting a small study in a small population of patients with severe EPI. In late April, AzurRx received approval to start the OPTION 2 clinical trial by the Therapeutics Development Network (TDN), which is a key partner in identifying cystic fibrosis patients to populate the company's clinical trials. The sanction by the TDN allows the OPTION 2 trial to access up to 91 accredited US care centers that specialize in CF. Shortly after the TDN announcement, AzurRx also received Institutional Review Board approval to launch the OPTION 2 trial at US sites for CF patients with EPI.
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1. This is in contrast to the hydroxypropyl methylcellulose (HPMC) capsules that were used in previous trials and used in the ongoing combination study for severe EPI patients.
2. Source: AzurRx Corporate Presentation, May 2020.
3. Source: AzurRX Corporate Presentation, May 2020
4. Source: AzurRX Corporate Presentation, May 2020
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